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Office of Investigations | Case Highlights

OIG Agents Bring Unlikely Co-conspirators to Justice

Date: 12/13/23 | Category: Health Care Provider Fraud

Our Fall 2023 Semiannual Report to Congress outlines the Department of Labor’s (DOL) workers’ compensation program and the unique challenges it presents to the Postal Service. Those challenges compound when healthcare providers exploit the program, just like the following case that happened in Houston, Texas.

Our OIG Hotline received a tip about suspected healthcare provider fraud involving an anesthesiologist and a pharmacy in the Houston area that produced compounded medications — that is, two or more ingredients mixed to create a custom medication. Our special agents collaborated with the DOL OIG, which was also working the case along with federal prosecutors.

OIG Hotline: A Valuable Resource

During the second half of FY 2023 alone, our Hotline received over 90,000 contacts. The tips and complaints received led to the initiation of many of our investigations and likewise informed our audit and research work.

Anyone who suspects fraud, waste, or abuse involving the Postal Service or its contractors can submit that information through our Hotline and can do so anonymously. Our website is the best place for that, so if you have a tip or complaint, simply click this link.


Investigators found that under the direction of its owner, the pharmacy was producing and distributing compounding creams, gels, and pain patches that were neither medically necessary nor medically beneficial to patients. Investigators also found the doctor was writing bogus prescriptions for his patients, often without their consent. Over 90 percent of those claims involved patients who worked for the Postal Service.

To show how well-oiled the operation was, our agents interviewed patients affected by the scheme, finding both gross overprescription and excessive billing. In one instance, a patient who had received almost $100,000 worth of prescriptions through the mail said she received so many parcels containing various pain treatments that she asked the pharmacy to stop sending them.

After examining scores of records, our agents found the anesthesiologist wrote over 90 percent of the prescriptions filled by the compounding pharmacy. Between 2013 and 2020, he billed the DOL almost $987,000 and was paid more than $237,000. As for the pharmacy, between 2016 and 2020, it billed the DOL about $9.4 million and was paid roughly $4.1 million. How did the two swindle the DOL and other agencies out of millions of dollars while nearly going undetected for years? It turns out they were more than partners in crime — they were husband and wife.

As with some white-collar crimes, the couple agreed to a civil settlement and paid the United States more than $7.9 million. Of the total settlement amount, more than $3.9 million was restitution. The Postal Service received more than $3.6 million in restitution, while the remainder was awarded to four other agencies also affected. Because of this complex yet well-executed investigation, the total savings to the government was more than $5.6 million after avoiding future fraudulent payments.

If you suspect or know of healthcare claimant fraud involving the Postal Service, please report it to our Hotline.

For further reading:

Department of Justice (via uspsoig.gov), Physician and pharmacy settle claims for unnecessary medications.